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Wednesday, November 17, 2010

Scotty Cameron - The Money Machine

Every couple of months, more during the season, I get an email from Scotty Cameron. Not actually from Scotty to me personally. I'm one of presumably hundreds, maybe thousands who are members of the Scotty Cameron Fan Club. We pay for the privilege - $100 or so for an annual membership to Club Cameron. Why do I do this? Well, I firstly like Scotty and what he does with putters and secondly I am a very interested observer in the business practice that essentially asks me to pay a fee to look at the merchandise. Great concept! Last time I looked Louis Vuitton, Hermes, heck, even Harry Winston on Madison Avenue let me walk into their shop for free.

Scotty has achieved the seemingly impossible. Make people join a club, put up the merchandise online and let the feeding frenzy begin. Members of the club, (who have 48 hour exclusive access) are literally fighting one another electronically to buy something with a Scotty dog embroidered into it. Amazing concept. Amazing execution.

Just for fun let's do some back of the envelope math. Let's say scottycameron.com launches a new headcover for $72 plus shipping plus tax. Well, he buys these from AM & E for, say $20, ok $25. He sells 2010, yes TWO THOUSAND AND TEN (the same number as the year) in one day! The gross for the day is a cool $144,720 (excluding the additional mark up on shipping). Net for the day, probably around $95,000. And, and it's a big AND, he does this 10 times a year. That's a Million Bucks a year, net from headcovers. That's not including golf bags, hats, even ladies tote bags and those pesky membership fees. Oh yes, he also sells putters and they are not cheap.

Today's offerings were sold out in a matter of hours and often with leather headcovers in limited quantities they sell out in minutes...minutes! The man is a marketing genius and no one has yet been able to replicate the model in the golf business. If  Titleist is indeed split up from Fortune Brands which is in the offing it will be interesting to see what happens to the money making putter maker.

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